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Audiocodes Ltd. — Earnings Release 2005
Jan 30, 2006
6659_rns_2006-01-31_07ff147b-f78a-4ac4-ba00-3e70a8d47725.pdf
Earnings Release
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PRESS RELEASE
Company Contacts IR Agency Contact Nachum Falek, Shirley Nakar, Erik Knettel, VP Finance & CFO Director, Investor Relations The Global Consulting Group AudioCodes AudioCodes Tel: +1-646-284-9415 Tel: +972-3-976-4000 Tel: +972-3-976-4072 [email protected] [email protected] [email protected]
AudioCodes Reports Fourth Quarter and Year End 2005 Results
Quarterly Revenues Rise 3% Sequentially and 21% Year-over-Year
Lod, Israel – January 30, 2006 – AudioCodes (NASDAQ: AUDC) , a leading provider of Voice over Packet (VoP) technologies and Voice Network products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2005.
Revenues for the fourth quarter ended December 31, 2005 were a record $30.6 million compared to $29.7 million for the quarter ended September 30, 2005 and $25.2 million for the quarter ended December 31, 2004. Fourth quarter revenues grew 3% sequentially and increased 21% compared to the fourth quarter of 2004. Net income for the fourth quarter of 2005 was $3.9 million, or $0.09 per diluted share, compared to net income of $3.5 million, or $0.08 per diluted share, in the third quarter of 2005 and $2.6 million, or $0.06 per diluted share, for the corresponding period last year.
Revenues for the year ended December 31, 2005 were a record $115.8 million compared to $82.8 million in 2004, a year-over-year increase of $33.1 million, or 40%. Net income for the year ended December 31, 2005 was $13.4 million, or $0.31 per diluted share, compared to net income of $5.0 million, or $0.12 per diluted share, in 2004.
Cash flow from operating activities was $3.4 million in the fourth quarter of 2005 and totaled $13.2 million in 2005, compared to $3.5 million in 2004.
Q4 2005 Year End Results
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Cash and cash equivalents, short-term and long-term marketable securities, short-term and long-term bank deposits and structured notes were $220.3 million as of December 31, 2005 compared to $217.1 million as of September 30, 2005 and $217.0 million as of December 31, 2004.
“AudioCodes had an excellent year in 2005, both strategically and financially. We grew revenue, secured strategic design wins, and executed on our initiative to develop direct relationships with service providers and be integrated into their networks. While investing substantially in our technology, products and people and growing staff by 17%, we were able to grow net income by 168%, improve our net income margin to 11.6% from 6% in 2004, and increase cash flow from operating activities year over year by 283%,” said Shabtai Adlersberg, President, Chairman and CEO of AudioCodes.
“Our financial achievements reflect the strength of our underlying business strategy and execution as we continue to capitalize on the growing worldwide market for VoIP networks and products. Within our networking business we experienced solid demand from service providers in access and trunking applications in wireline, wireless and cable customers, and further strengthened our position as leading vendor of VoIP media gateway and media server products across a range of densities. New meaningful design wins with service providers and leading NEPs in the fourth quarter of 2005 further validate the quality, performance and competitiveness of our offerings that continue to drive business unit growth, as well as broaden our base of partners and customers.
“Looking ahead to 2006, we continue to forecast market growth and increased demand for our products. We anticipate additional organic growth and a strengthened sales pipeline due to new customer wins and current integration activities with service providers and OEMs. Moreover, emerging interest in areas such as IMS, fixed mobile convergence, and VoIP over broadband are expected to provide further catalysts for AudioCodes’ long-term business growth,” stated Mr. Adlersberg.
Conference Call & Webcast Information
AudioCodes will conduct a conference call on January 31, 2006 to discuss the fourth quarter and year end 2005 financial results, which will be simultaneously Webcast at 9:00 A.M. Eastern Time. Investors are invited to listen to the call live via Webcast at the AudioCodes corporate Website at http://www.audiocodes.com.
Q4 2005 Year End Results
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About AudioCodes
AudioCodes Ltd. enables the new voice infrastructure by providing innovative, reliable and cost-effective Voice over Packet technology and Voice Network products to OEMs, network equipment providers and system integrators. AudioCodes provides its customers and partners with a diverse range of flexible, comprehensive media gateway and media processing technologies, based on VoIPerfect(TM) -- AudioCodes' underlying, best-of-breed, core media gateway architecture. The company is a market leader in voice compression technology and is a key originator of the ITU G.723.1 standard for the emerging Voice over IP market. AudioCodes voice network products feature media gateway and media server platforms for packetbased applications in the converged, wireline, wireless, broadband access, and enhanced voice services markets. AudioCodes enabling technology products include VoIP and CTI communication boards, VoIP media gateway processors and modules, and CPE devices. Its customers include the leading telecom and data network equipment providers globally. AudioCodes' headquarters and R&D facilities are located in Israel with an R&D extension in the U.S. Other AudioCodes' offices are located in Europe, the Far East, and Latin America. For more information on AudioCodes, visit http://www.audiocodes.com.
Statements concerning AudioCodes' business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. Federal securities laws. Forwardlooking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes' industry and target markets in particular; shifts in supply and demand; market acceptance of new products and continuing products' demand; the impact of competitive products and pricing on AudioCodes' and its customers' products and markets; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; and other factors detailed in AudioCodes' filings with the Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
AudioCodes, AC, Ardito, AudioCoded, NetCoder, TrunkPack, VoicePacketizer, MediaPack, Stretto, Mediant, VoIPerfect IPmedia and Your Gateway to VoIP are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners.
Summary financial data follows
Q4 2005 Year End Results
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AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS U.S. dollars in thousands
| ASSETSCURRENT ASSETS:Cash and cash equivalentsShort-term bank deposits and structured notesShort-term marketable securities and accrued interestTrade receivables, netOther receivables and prepaid expensesInventoriesTotal current assetsLONG-TERM INVESTMENTS:Long-term bank deposits and structured notesLong-term marketable securitiesInvestments in companiesDeferred tax assetsSeverance pay fundsTotal long-term investmentsPROPERTY AND EQUIPMENT, NETINTANGIBLE ASSETS, DEFERRED CHARGES AND OTHER, NETGOODWILLTotal assetsLIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Trade payablesOther payables and accrued expensesTotal current liabilitiesACCRUED SEVERANCE PAYSENIOR CONVERTIBLE NOTESTotal shareholders' equityTotal liabilities and shareholders' equity | December 31, | December 31, |
|---|---|---|
| 2005$ 70,95761,9299,86317,9904,89111,562177,19227,78149,7911,1122,4895,40686,5796,4943,27918,679$292,223$ 7,77418,62026,3945,887120,836139,106$292,223 | 2004 | |
| $ 166,832--14,4704,60810,059 | ||
| 195,969 | ||
| 50,195-487-4,538 | ||
| 55,220 | ||
| 6,694 | ||
| 5,127 | ||
| 9,135 | ||
| $272,145 | ||
| $ 6,54117,981 | ||
| 24,522 | ||
| 4,978 | ||
| 120,660 | ||
| 121,985 | ||
| $272,145 |
Q4 2005 Year End Results
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AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS U.S. dollars in thousands, except share and per share data
| RevenuesCost of revenuesGross profitOperating expenses:Research and development, netSelling and marketingGeneral and administrativeTotal operating expensesOperating incomeFinancial income, netEquity in losses of affiliated companies, netIncome before taxes on incomeTaxes on incomeNet incomeBasic net earnings per shareDiluted net earnings per shareWeighted average number of shares used incomputing basic net earnings per share (inthousands)Weighted average number of shares used incomputing diluted net earnings per share (inthousands) | Year endedDecember 31,20052004$ 115,827$ 82,75646,99334,37568,83448,38124,41520,00925,94419,8916,0044,85156,36344,75112,4713,6302,4572,166(693)(517)14,2355,279799273$13,436$ 5,006$ 0.33$ 0.13$ 0.31$ 0.1240,29638,61443,08642,607 | Three months endedDecember 31, | Three months endedDecember 31, |
|---|---|---|---|
| 2005$ 115,82746,99368,83424,41525,9446,00456,36312,4712,457(693)14,235799$13,436$ 0.33$ 0.3140,29643,086 | 20052004Unaudited | 2004 | |
| $ 30,64012,28918,3516,4566,9601,62115,0373,314949(95)4,168264$ 3,904$ 0.10$ 0.0940,54543,117 | $ 25,24110,290 | ||
| 14,9515,5265,5451,487 | |||
| 12,558 | |||
| 2,393550(181) | |||
| 2,762172 | |||
| $2,590 | |||
| $ 0.07 | |||
| $ 0.06 | |||
| 39,393 | |||
| 43,400 |
Q4 2005 Year End Results
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AUDIOCODES LTD. AND ITS SUBSIDIARIES CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS U.S. dollars in thousands
| Three months | Three months | ||||
|---|---|---|---|---|---|
| Year endedDecember 31,2005 | endedDecember 31,2005 | ||||
| Unaudited | |||||
| Cash flows from operating activities:Net incomeAdjustments required to reconcile net income to net cash provided byactivities:Depreciation and amortizationAmortization of marketable securities premium and accretion of disEquity in losses of affiliated companies, netIncrease (decrease) in accrued severance pay, netAmortization of deferred stock compensationAmortization of senior convertible notes discount and deferred charIncrease in accrued interest on marketable securities, bank depositsstructured notesIncrease in deferred tax assetsIncrease in trade receivables, netDecrease (increase) in other receivables and prepaid expensesIncrease in inventoriesIncrease in trade payablesIncrease in other payables and accrued expensesOtherNet cash provided by operating activitiesCash flows from investing activities:Investment in short-term marketable securitiesInvestment in short-term bank depositsProceeds from sale of short-term bank depositsInvestments in companiesPurchase of property and equipmentProceeds from sale of property and equipmentInvestment in structured notesProceeds from structured notes called by the banksInvestment in long-term marketable securitiesPayment for acquisition of Ai-LogixNet cash used in investing activitiesCh fl f fii iii | |||||
| $ 13436 | $ 3904 | ||||
| operatingcount, netgesand | ,3,2961436934136195(736)(2033) | ,8726195(30)650(545)(2033) | |||
| ,(3,520) | ,(733) | ||||
| 57(1,503)1,2331,912 (12)13,238 | (150)(1,141)9612,087- | ||||
| 3,404 | |||||
| (3,051)(33969) | - | ||||
| ,3,969(1668) | -3,969(63) | ||||
| ,(2,315)96(20,000)10,000(56,009) (10,000) | (842)---(11,046)- | ||||
| (112,947) | (7,982) | ||||
| as ows rom nancng actvtes:Issuance costs for senior convertible notesProceeds from issuance of shares upon exercise of options and employee stockpurchase planNet cash provided by financing activitiesDecrease in cash and cash equivalentsCash and cash equivalents at the beginning of the periodCash and cash equivalents at the end of the period | (84)3,9183,834(95,875)166,832 $70,957 | -296 | |||
| 296 | |||||
| (4,282)75,239 | |||||
| $70,957 |
Q4 2005 Year End Results
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